Liver cancer is the sixth most common tumor in the world and the majority of patients with this disease usually die within 1 year. The effective treatment for end-stage liver disease (also known as liver failure), including liver cancer or cirrhosis, is liver transplantation. However, there is a severe shortage of liver donors worldwide, which is the major handicap for the treatment of patients with liver failure. Scarcity of liver donors underscores the urgent need of using stem cell therapy to the end-stage liver disease. Notably, hepatocytes have recently been generated from hepatic and extra-hepatic stem cells. We have obtained mature and functional hepatocytes from rat hepatic stem cells. Here, we review the advancements on hepatic differentiation from various stem cells, including hepatic stem cells, embryonic stem cells, the induced pluripotent stem cells, hematopoietic stem cells, mesenchymal stem cells, and probably spermatogonial stem cells. The advantages, disadvantages, and concerns on differentiation of these stem cells into hepatic cells are highlighted. We further address the methodologies, phenotypes, and functional characterization on the differentiation of numerous stem cells into hepatic cells. Differentiation of stem cells into mature and functional hepatocytes, especially from an extra-hepatic stem cell source, would circumvent the scarcity of liver donors and human hepatocytes, and most importantly it would offer an ideal and promising source of hepatocytes for cell therapy and tissue engineering in treating liver disease.